Glenn Simpson Has Given Us a Russiagate Road Map

His House testimony points to Trump’s alleged ties to Russian and Italian mafias, money laundering, and shady real-estate deals.

January 26, 2018

Glenn Simpson, former journalist and co-founder of the research firm Fusion GPS, arrives for a scheduled appearance before a closed House Intelligence Committee hearing on November 14, 2017. (AP Photo / Pablo Martinez Monsivais)

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It’s no surprise that congressional Republicans would rather you didn’t pay attention to the actual content of Glenn Simpson’s November 14 testimony in front of the House Permanent Select Committee on Intelligence (HPSCI). That’s because Simpson, the founder of Fusion GPS and the person who contracted with former MI-6 Russia specialist Christopher Steele to investigate the Trump campaign’s Russia ties in 2016, gave committee members a virtual master class in how to investigate Russiagate: what to look for, where to look, and how to find it.

First, though, a quick reminder about Simpson and his company: A former journalist who had worked for Roll Call and then The Wall Street Journal, in 2011 Simpson founded Fusion GPS—which according to its website provides “research, strategic intelligence, and due diligence services to corporations, law firms, and investors.” In September 2015, Simpson’s firm was retained by The Washington Free Beacon, a conservative news outlet, apparently acting on behalf of one or more of Donald Trump’s Republican primary opponents. After Trump secured the GOP nomination in the spring of 2016, Fusion GPS was retained by a Democratic law firm, Perkins Coie, acting on behalf of the Democratic National Committee and the Clinton campaign, after which Fusion continued its investigation of the alleged Russia connections, hiring Steele to help in the effort.

Russiagate

In six hours of testimony before the HPSCI, whose transcript was released only on January 18, Simpson elaborated on what he and his colleagues found during a year-long inquiry into Trump’s business practices, ranging from money laundering to Trump’s vodka brand, the Miss Universe pageant, unprofitable golf resorts, shady Central Asian business deals, real-estate shenanigans in Toronto, Panama, and New York, and Trump’s reputed ties to both the Italian and Russian mafias. What Simpson outlined, gathered over at least 14 months of digging by his firm, went far beyond the so-called Trump-Russia dossier, the 35-page series of raw intelligence reports compiled by Steele and published in full in January 2017 by BuzzFeed.

Simpson’s testimony provides a virtual road map not only to congressional investigators but to special counsel Robert Mueller.

Simpson’s HPSCI testimony—which took place three months after his testimony before the Senate Judiciary Committee, which was released earlier this month by Senator Dianne Feinstein and reported by The Nation on January 12—provides a virtual road map not only to congressional investigators but to Robert Mueller, the Russiagate special counsel (although Mueller, whose team has been digging for a while, was probably already looking into most of the dark corners Simpson pointed to).

The Republicans, who have lined up as a virtual Donald Trump defense team (especially in the House), have recently raised a big fuss under the hashtag #ReleaseTheMemo. Building to a crescendo over the past two weeks or so, the GOP claims that a particular memo—apparently written by Republican staffers on HPSCI—will help unveil a conspiracy between Mueller, the FBI, Fusion GPS, Hillary Clinton, and the Democratic National Committee to foist Russiagate on an unsuspecting America. “Not surprisingly, the GOP campaign to attack the FBI now has been joined by the same forces that made common cause during the Trump campaign—Wikileaks, Julian Assange and a multitude of online Russian bots are now involved in promoting this effort,” said a statement released on January 19 by all nine Democrats who sit on HPSCI. “It should be seen for what it so plainly is: yet another desperate and flailing attempt to undermine Special Counsel Mueller and the FBI, regardless of the profound damage it does to our democratic institutions and national security agencies.”

Simpson’s testimony, contained in a 165-page transcript, provides at least a dozen leads for investigators, including HPSCI, seeking to unravel Trump’s Russia connections.

Let’s go sequentially through the transcript.

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At the very start, Simpson points out that his Fusion GPS investigation didn’t start by looking only at Trump-Russia. It began, he said, by compiling data on Trump’s overseas business deals, tax disputes, “labor practices around his factories,” his bankruptcies, and his business partners. And what popped up early on was Trump’s connection to Felix Sater, whose company, Bayrock, “was engaged in illicit financial business activity and had organized crime connections.” (As The Nationreported in September, it was Sater who in November 2015 wrote Trump’s lawyer, Michael Cohen, “Our boy can become president of the USA and we can engineer it.… I will get all of [Vladimir] Putins [sic] team to buy in on this.”)

“It seemed as if during the early part of his career [Trump] had connections to a lot of Italian mafia figures, and then gradually during the nineties became associated with Russian mafia figures.”

“We also had sort of more broadly learned that Mr. Trump had long time associations with Italian organized crime figures,” Simpson told HPSCI, based on his research. “And as we pieced together the early years of his biography, it seemed as if during the early part of his career he had connections to a lot of Italian mafia figures, and then gradually during the nineties became associated with Russian mafia figures.”

In his testimony, Simpson didn’t provide details to back up his charges about Trump’s alleged ties to the mob. However, over the past two years, numerous articles have drawn connections between Trump, his businesses, and both Italian and Russian organized crime. During the primary campaign, Senator Ted Cruz talked about Trump’s “business dealings with the mob, with the mafia,” and Politifact backed him up. In May 2016, David Cay Johnston, writing in Politico, penned a lengthy piece on the subject. And as recently as November, a joint NBC/Reuters investigation tied Trump to mobsters and other criminals in connection with the Trump Ocean Club International Hotel and Tower in Panama City. In his just-released testimony, as we shall see, Simpson refers several times to Trump’s possible money-laundering ties to Russians in Panama and elsewhere.

The mastermind of Russia’s approach to the 2016 election, according to Simpson, didn’t reside within Russia’s foreign-intelligence service, the SVR. Instead, he said, it was run by Sergei Ivanov, “the head of the presidential administration” (that is, Putin’s chief of staff). “As I dug into some of the more obscure academic work on how the Kremlin operates by some of the more distinguished scholars of the subject, I found that Ivanov is, in fact, or was at the time, in fact, the head of a sort of internal kind of White House plumber’s operation for the Kremlin and that he seemed to have the kind of duties that were being described in [the dossier].” (By “White House plumbers,” of course, Simpson is making an analogy to President Richard Nixon’s Watergate team, nicknamed “the plumbers” because their initial job was to find and plug the sources of leaks from the White House.)

“We saw patterns of buying and selling that we thought were suggestive of money laundering.… various criminals were buying [Trump’s] properties.”

According to Simpson, Russian organized crime is far more sophisticated than the Italian version, especially when it comes to money laundering, with closer ties to major businesses, especially in real estate. Asked whether Fusion GPS found any evidence that Trump was linked to such money-laundering activity, Simpson was cautious. “‘Evidence,’ I think, is a strong word. I think we saw patterns of buying and selling that we thought were suggestive of money laundering.… various criminals were buying [Trump’s] properties.” One of them, a major Russian organized-crime figure, “was running a high-stakes gambling ring out of Trump Tower, while he himself was a fugitive for having rigged the skating competition at the Salt Lake [City] Olympics and a bunch of other sporting events engaged in rigging.” When Trump went to Moscow for the 2013 Miss Universe pageant, this gangster was in the VIP section “with Mr. Trump and lots of other Kremlin biggies.” Simpson said that the individual was called “Taiwanchik,” an apparent reference to Alimzhan Tokhtakhunov, who, according to the Moscow Times, is an alleged gangster sought by the United States.

Trump’s various golf resorts were the subject of intense scrutiny by Simpson. Taking note of statements by Eric Trump that the golf-course projects benefited from Russian investments, Simpson began digging. “So we were able to get the financial statements. And they don’t, on their face, show Russian involvement, but what they do show is enormous amounts of capital flowing into these projects from unknown sources and—or at least on paper it says it’s from The Trump Organization, but it’s hundreds of millions of dollars. And these golf course [sic] are just, you know, they’re sinks. They don’t actually make any money,” said Simpson. “If you’re familiar with Donald Trump’s finances and the litigation over whether he’s really a billionaire, you know, there’s good reason to believe he doesn’t have enough money to do this and that he would have had to have outside financial support for these things.”

Which raises two questions: Did Trump, knowingly or unknowingly, help Russians launder money through investing in his golf resorts? And did those investments obligate Trump to shadowy Russian interests or make him vulnerable to blackmail?

Before the 2013 Miss Universe pageant, Trump was marketing his Trump vodka brand in Russia. Simpson says that early in Fusion GPS’s investigation, he discovered “an orchestrated effort by someone to help Trump out with—to help him market, you know, these branded products in Russia,” an effort that Simpson described as “mysterious.” And one of the people who joined Trump in this effort was apparently Sergei (“Sergi” in the transcript) Millian, one of the sources Steele used in putting together the Trump-Russia dossier. Millian, according to Simpson, “ran a sort of shadowy kind of trade group called the Russian-American Chamber of Commerce.” (According to a March 29, 2017, Washington Post report, Millian told associates that Russian officials connected to Trump had been “very helpful” in providing information to Trump’s campaign about Hillary Clinton.) “As further time went on, we found [Millian] was connected to Michael Cohen, the President’s lawyer,” said Simpson.

“It seemed like most of the people around Trump had a connection to Russian organized crime or Russia in one way or another.”

Cohen, says Simpson, is a treasure trove of investigative leads. “Partly through Sergi Millian, partly through other things we learned, we gradually began to understand more about Michael Cohen, the President’s lawyer, and his background, and that he had a lot of connections to the former Soviet Union, and that he seemed to have associations with organized crime figures in New York and Florida, Russian organized crime figures,” said Simpson. “It gradually reached a point where it seemed like most of the people around Trump had a connection to Russian organized crime or Russia in one way or another.”

Gradually, Simpson and Steele concluded that a pattern was emerging. “Back then we had what appeared to be credible allegations of some sort of a pattern of surreptitious contacts between the Trump campaign and Russian people either working for the government or acting on behalf of the Russian Government,” said Simpson. “I think that the evidence that has developed over the last year, since President Trump took office, is that there is a well-established pattern of surreptitious contacts that occurred last year that supports the broad allegation of some sort of an undisclosed political or financial relationship between The Trump Organization and people in Russia.”

Under questioning by Representative Adam Schiff, the Democrat who is the ranking minority member on HPSCI, Simpson began to lay out detailed recommendations on which people, which bank records, which real estate transactions, ought to be mined for potentially incriminating information—including in connection with Trump’s golf resorts and other properties in Panama, Toronto, and elsewhere.

It’s not that hard, Simpson said. “I’m trying to think of the creative way to do this. I mean, as you may know, you know, most of these transactions are cleared through New York. And the other sort of central place for information is SWIFT in Brussels. But I would go for the clearing banks in New York that cleared the transactions,” said Simpson. “And there’s—again, it’s these sort of intermediary entities that have no real interest in protecting the information, and all you have to do is ask for it and they just sort of produce it by rote. So we’ve done a lot of money laundering investigations where we go to the trust companies and the clearing entities.”

When Schiff ended his round of questioning, Representative Tom Rooney, a Republican from Florida, picked up the thread. This hilarious exchange followed: “All those questions that Mr. Schiff asked about, you know, with the subpoena power and where we would go if we wanted to find out about Scotland and Panama and Toronto and Ireland, and you were talking about like the brokers and I guess the banks in Switzerland and New York, my only question is, why didn’t you do that?” asked Rooney. Answered Simpson: “I don’t have subpoena power.”

In another exchange with Schiff, Simpson described possible ties between Trump, his company, and Russian mobsters who may have engaged in secret, fraudulent efforts to help Trump secure bank loans. According to Simpson, in the mid-2000s Trump had run into serious financial difficulties, unable to secure bank credit. Simpson went on to describe what he called “alternative systems of financing” that he said were not legal. In projects in Toronto and Panama City, Trump realized he could get bank credit if he could show that a certain number of units in the proposed building projects had been pre-purchased.

“And so the real trick is to get people who say they’ve bought those units, and that’s where the Russians are to be found, is in some of those pre-sales, is what they’re called. And that’s how, for instance, in Panama they got the credit of—they got a—Bear Stearns to issue a bond by telling Bear Stearns that they’d sold a bunch of units to a bunch of Russian gangsters. And, of course, they didn’t put that in the underwriting information, they just said, we’ve sold a bunch of units and here’s who bought them, and that’s how they got the credit. So that’s sort of an example of the alternative financing,” he explained. Some of those ersatz pre-sales were arranged by Sergei Millian, added Simpson.

Asked by Schiff what happens if the buyers don’t actually follow through with their purchases, Simpson said that would be illegal. “So it’s fraud if they don’t,” he said. “I mean, you have to warrant to the lender that you’ve already sold X number of units. And there’s supposed to be contracts, down payments, all of that sort of thing. So in the case of Panama where the evidence is the most vivid, there’s—the buyers were fake. I mean, they were real people. They just never paid.” And how does he know that? “It’s in public records.” Simpson didn’t specify which records.

What happened in Panama happened in Toronto, too, said Simpson. “I believe there are lawsuits in Toronto with similar allegations and the guys connected to the Toronto project are Russian mafia too. And, in fact, there’s Toronto-based Russian mafia guys who are involved in the Panama project.”

As Simpson points out, only an entity with subpoena power and other investigative tools needed to secure the proper documents and records—HPSCI? Mueller? the FBI?—could prove such allegations. And if the charges are accurate, it’s easy to understand why Trump and the Trump Organization might be vulnerable to political blackmail from various Russian-connected entities and organized-crime figures, dating back to long before Trump decided to run for president.

Bob DreyfussBob Dreyfuss, a Nation contributing editor, is an independent investigative journalist who specializes in politics and national security.